GM raises its profit forecast, stock jumps

finance
2 months ago
CNN — By Chris Isidore, CNN Business

BEIJING, CHINA - APRIL 25: A Cadillac CT6 Sedan is on display during the Auto China 2018 at China International Exhibition Center on April 25, 2018 in Beijing, China. Auto China 2018, also known as 2018 Beijing International Automotive Exhibition, will be held from April 27 to May 4.

(Photo by VCG/VCG via Getty Images)

General Motors expects better times ahead after announcing it would close three US factories this year.

The company said Friday its full-year 2018 earnings would be better than the guidance it provided investors just 10 weeks ago. And it said it expects earnings in 2019 to rise more than it previously expected.

If GM hits the upper end of its 2019 earnings target of $7 a share, the company would set a new operating profit record.

In November, GM announced plans to close three US plants and as a plant in Canada. It also said it would cut its salaried staff by 15%. GM said it needed to cut costs by $6 billion to invest in the next generation of electric and self-driving vehicles.

It gave more details of those future plans Friday: GM said its luxury Cadillac brand will become GM's lead electric vehicle brand. The the first model from the company's next generation of all-electric vehicles will be a Cadillac.

Cadillac has not yet made any all-electric vehicles.

GM also said it expects to begin commercial use of self-driving vehicles in cities in the coming year. It has conducted road tests of self-driving vehicles, but it has not yet earned any money from them. Last week, GM announced a partnership with DoorDash to use self-driving cars for food delivery.

Despite the recent signs of a slowdown in Chinese auto sales, GM said it expects industrywide sales in China, its largest market, will be in line with 2018 sales. It said it expects to launch 20 new or redesigned vehicles in China this year. And it said it expects industrywide US auto sales to top 17 million once again in 2019, despite a declining market for car models.